N.J. Senate President: Icahn Is Trying To Sell Out Atlantic City Casino Workers

The Trump Taj Mahal Hotel and Casino in Atlantic City, New Jersey, is pictured in 2007. (Photo credit should read SAUL LOEB/AFP/Getty Images)

ATLANTIC CITY, N.J. (CBSNewYork/AP) — Businessman Carl Icahn and New Jersey state Senate President Stephen Sweeney launched into a war of words Friday over Icahn’s plan for to keep one iconic casino open.

“It would shock me if it didn’t, the way this guy’s playing it now – Mr. Icahn’s playing it,” Sweeney said.

N.J. Senate President: Icahn Is Trying To Sell Out Atlantic City Casino Workers

Trump Entertainment has threatened to close the Taj Mahal on Nov. 13. Icahn said he would give the casino $100 million to keep it open, but only in return for union givebacks and tax credits.

Sweeney accused Icahn of sticking it to casino workers by his plan to end payments into the pension and union health fund, on top of wanting $25 million in state aid.

“And if he doesn’t get everything he wants, he’s closing anyway – what he’s basically said,” Sweeney said. “But if he can get all this money from the taxpayers and the workers, then he’ll make an investment in the property.”

Sweeney said such investments should have come anyway. But Icahn said the funds have already been invested in the Tropicana Casino & Resort, and will be in U.S. District Court Tuesday asking a judge to force the concessions.

Icahn also accused Sweeney of “selling out” Atlantic City by considering casinos in parts of New Jersey closer to New York City.

Icahn responded Friday to stinging criticism by state Senate President Steven Sweeney and others about Icahn’s role in a proposed bailout of the struggling Trump Taj Mahal Casino Resort. Icahn said he would give the casino $100 million, but only in return for union givebacks and tax credits.

Sweeney on Friday ruled out any state contribution to Trump Entertainment Resorts’ proposed transfer to Icahn. That made it even more likely the Taj Mahal will close on Nov. 13, as Trump Entertainment has threatened to do.

Icahn said Sweeney, who is also a union leader, “is selling out Atlantic City” by publicly considering expanding casino gambling to the Meadowlands — something he and many other southern New Jersey politicians were once solidly against. Icahn noted that he bought the Tropicana out of bankruptcy four years ago when it was in danger of closing, invested in it and added jobs.

“Sweeney is selling out Atlantic City to northern New Jersey on the one hand, and now he’s telling all these employees in Atlantic City that Carl Icahn is to blame, when I’m the only one that took a risk with $80 million when no one else would,” Icahn told The Associated Press.

Icahn said investors are shying away from Atlantic City because they are afraid casinos will be approved for north Jersey, killing the seaside resort’s monopoly on gambling in New Jersey.

“On the one hand, we are to believe Sen. Sweeney is Atlantic City’s staunchest defender, yet on the other hand, the same Sen. Sweeney is off in north Jersey making plans to allow gaming outside of New York City, a concession that may mean the end of gaming in Atlantic City,” Icahn said. “Sen. Sweeney, what you are doing here is selling out the people you represent in a remarkable act of contortionism. Harry Houdini would be very proud.”

In July, Sweeney spoke at a news conference with Atlantic City Mayor Don Guardian and state senator James Whelan about the possibility of expanding casino gambling beyond Atlantic City, which would require amending the state constitution. At the news conference, Sweeney was vague about what expanding casinos outside Atlantic City would entail, promising only that he would not put forth any bill that does not sufficiently help Atlantic City.

Trump Entertainment crafted the proposal to keep the Taj Mahal open and turn it over to Icahn, who owns about $285 million worth of the company’s debt. Under the plan, Icahn would invest $100 million into the casino, but only if Atlantic City drastically reduced the company’s property tax assessment, union workers gave up their pension and health insurance, and a state redevelopment agency contributed $25 million in tax credits.

Atlantic City and the state have rejected those terms. Trump Entertainment is seeking to have a Delaware bankruptcy court judge let it terminate its union contract. A decision could come next week.

In a court filing Friday, Trump Entertainment accused the union of preparing to sacrifice the jobs of 3,000 Taj Mahal workers to protect workers at other casinos. Concessions the union agrees to at Taj Mahal would then be allowed at all other Atlantic City casinos under a long-standing clause in the union contract.

The filing also says that the Taj Mahal has not gained new customers since Revel and the Showboat closed five weeks ago. Rather, its revenue has decreased by 20 percent.

The Taj Mahal would be the fifth of Atlantic City’s 12 casinos to go out of business this year.